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Thursday, November 17, 2016

Sierra Club Files Antitrust Complaint Concerning the NEXUS Gas Pipeline

Thursday, November 17, 2016
Contact: Jonathon Berman, (202) 495-3033jonathon.berman@sierraclub.org
Sierra Club Files Antitrust Complaint Concerning the NEXUS Gas Pipeline
Washington, DC -- The Sierra Club has filed a complaint against Michigan’s largest electric utility, DTE Electric Company, alleging that a 250-mile, multi-billion dollar gas pipeline project owned by its affiliate, NEXUS Gas Transmission, LLC, threatens to monopolize the market for the generation of electricity in Michigan. The complaint alleges that the pipeline project, if permitted to continue, will raise retail electricity customers’ rates above competitive levels and exclude more cost-effective energy suppliers, including renewable energy sources.
The complaint was filed with the Federal Energy Regulatory Commission (FERC), United States Department of Justice, and the Federal Trade Commission. It alleges that while electric utilities like DTE Electric have legal monopolies to sell electricity to ratepayers, they cannot use that monopoly to gain control over the market for generating capacity. According to the complaint, the NEXUS project uses DTE Electric’s power to charge ratepayers for the project’s above-market costs in order to expand its presence in the generation market. DTE Electric already controls about 50% of the local electricity generation market, according to the complaint.  
“The dirty and dangerous NEXUS project is a payoff scheme for corporate polluters with Michigan consumers footing the bill,” said David Holtz, Chair of the Michigan chapter of the Sierra Club. “Solar and wind power continues to be a better and cheaper alternative to dirty fuels, which only gives further indication as to the real reason behind this pipeline.”
The Sierra Club’s complaint comes on the heels of an antitrust complaint filed with the Federal Trade Commission by a retired Department of Justice Antitrust Division attorney regarding the Atlantic Coast Pipeline Project, a 600-mile proposed gas pipeline co-owned by electric utilities Dominion Resources and Duke Energy. According to the latter complaint, the Atlantic Coast Pipeline gives Dominion and Duke unlawful monopoly power in the market for utility-scale electricity generation.
“Our complaint shows that there is no plausible competitive justification for DTE Electric to make a long-term commitment to buy gas at above-market prices,” said Pat Gallagher, Director of the Sierra Club’s Environmental Law Program. “The federal competition authorities should take notice because ratepayers, the environment, and competition in the generation market all are harmed by this deal.”
Both complaints add to increasing scrutiny and criticism of the overexpansion of gas pipeline capacity throughout the United States. The Sierra Club’s complaint refers to statistics published by the United States Energy Information Administration showing that 46% of the nation’s gas pipeline capacity is unused, even as new pipeline projects continue to be approved by federal regulators. The Club’s complaint highlights perverse incentives toward overbuilding gas pipelines that arise when the pipelines are owned and operated by utility affiliates, pointing out that the Federal Energy Regulatory Commission typically allows high profit margins on new pipeline projects, even as state regulators permit developers to pass off the costs of pipeline construction to retail ratepayers. According to the complaint, “the combination of abnormally high profit margins with the ability to shift project risks to ratepayers creates a powerful incentive to overbuild natural gas pipelines.” The Complaint charges that DTE Electric has taken the trend of overexpansion one step further by using this low-risk, high-profit transaction structure to gain control over the market for the generation of electricity in Michigan.
The Club’s FTC complaint in the FERC proceeding is part of a motion to dismiss filed on November 16 by Michigan members who oppose NEXUS’ application for a certificate of public convenience and necessity. There, the Club charges that DTE’s ratemaking scheme is clearly not in the public interest.  “DTE’s machinations fall well short of the Commission’s expectation that the pipeline must not penalize existing customers,” said Terry Lodge, attorney for the Michigan Sierrans. “NEXUS flatly refuses to consider any alternatives but a greenfield pipeline, built on the backs of residential and business customers. We believe that violates the Commission’s environmental and consumer-protective mandates and are asking FERC to say ‘no’ to NEXUS.”
About the Sierra Club
The Sierra Club is America’s largest and most influential grassroots environmental organization, with more than 2.4 million members and supporters nationwide. In addition to creating opportunities for people of all ages, levels and locations to have meaningful outdoor experiences, the Sierra Club works to safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and litigation. For more information, visit http://www.sierraclub.org.

Wednesday, November 16, 2016

The Tsuga’s View - A Long-Term Look At Environmental, Political, and Social Issues, From The Perspective Of Michigan’s Oldest (and Most Optimistic) Tree Species

By Marvin Roberson

Welcome to the first installment of “The Tsuga’s View”, an irregular (in many senses of the word) look at Progressive Issues and Politics, with a positive emphasis on where we are, how we got there, and why we should keep working for the common good, even in the face of adversity.

In this first column, I’ll describe the life cycle of Tsuga canadensis (Eastern Hemlock), what we can learn from it, and how it makes a good metaphor (and example) for progressive issues. In the next issue, I’ll describe the general concept behind applying this life strategy, and why things are much, much better than they seem. And in future installments, I’ll apply this idea to specific issues about which we should and do care.

I went to the Michigan Secretary of State a couple weeks ago, and applied for a personalized license plate. I’m a Forest Ecologist, and I applied for “TSUGA”, in honor of Tsuga canadensis, the scientific name for Eastern Hemlock, my favorite tree.

I say “applied for”, because a few years ago I ordered “Pinus”, in honor of Pinus strobus, or White Pine. This plate was rejected by the Secretary of State on the grounds that some might find it “obscene”, despite the fact that Pinus strobus is the State Tree of Michigan, and “Pinus” appears dozens of times on State-owned web sites. Apparently, Beavis and Butt-Head run the license plate office (“Heh, heh - he said ‘Pinus’ “). To view dozens of news articles about this license plate debacle, Google “Pinus license plate”.

I applied for this plate before the election, and of course, before any of us had an inkling of what the election might bring. While I’m not foresightful enough to have ordered the plate as a prelude to the election, I do think it’s apropos. I’ll be glad to sport “TSUGA”,  not only because I love the tree, but because the very facts about the life cycle of Hemlock which I love also make it a great metaphor for our current political situation.

Hemlock is the longest-lived of Michigan tree species, with some specimens reaching 800 years of age. Trees often take 250 - 300 years to reach maturity. Hemlock is patient. However, once Hemlock gets established on a site, it sets up camp and stays there, often for thousands of years.

Hemlock exerts something called “Hemlock control” over sites where it gets established. Hemlock can grow in very acidic soils, in conditions where most species cannot thrive. Not only does Hemlock thrive in acidic conditions, but it’s needles are also very acidic.

Once established, Hemlock begins to “control” the site by dropping it’s own needles. The already acidic soil becomes even more so, further inhibiting growth of other species. The shade from the mature trees also works to keep other species from colonizing the site.

This can go on for thousands of years, as the slow growing, slow maturing, very long lived trees continue to alter the site, making it more acidic, cooler and shadier, which is more conducive to Hemlock, and less favorable to species needing more nutrient rich soils.

Every once in a while, something disturbs the site, and interrupts this cycle, seemingly rolling back progress. Let’s say a lightning strike hits the base of a mature tree, and starts a fire in the layer of dried, dead needles on the ground. This burns up those needles, reducing the acidity, and kills the smaller trees, causing more sunlight and warmth. Further changing the site, the ash from the fire is more basic (less acidic), allowing nutrient loving species to come in and colonize.

Things are looking bad for our Hemlock grove, aren’t they? But wait - things aren’t necessarily as they seem. Because it’s pretty rare that these surface fires kill the huge, old Hemlocks. This means that even as the new species, which need non-acidic soils, are getting established, the Hemlocks are re-working the site, making it more acidic once again.

The big trees are also continuing to shade out the site, and are dropping Hemlock seeds, which can thrive in the re-acidified soils. In addition, the new nutrients from the ashes of the fire are temporary. The fire was a single occurrence, and the changes to the soil do not re-occur. So the colonizing species use up the nutrients, and are left once again with shady, wet, cool, acidic, Hemlock-friendly conditions.

So the long-term strategy of the Hemlock works, and prevails, even in the face of seemingly catastrophic disturbances like wildfires, and competition from other species. These disturbances appear to roll back the progress of the Hemlock, and in fact, temporarily do that. But the life cycle of the Hemlock is so strong and substantial that progress is made, even as setbacks happen.

We just had a wildfire like nobody imagined, it’s still burning, and frankly promises to do so for a while. But I will claim that Progressive ideas are like the Hemlock - long-lived, resilient, and able to prevail in the long run.

And the long run is the view that we should be taking, like the Hemlock. Our huge, massive, site-altering Progressive trees are still alive and dropping seeds. Many of the things we see as “setbacks” are actually indicators of progress. Much of what we have accomplished will not be lost, even if it is rolled back for a while. And the direction our society is moving is inexorably the right one.

In the next installment, I explain why things which seem like “setbacks” are actually indicators of progress, why we’re moving in the right direction, and why reports that “Sunshine Marvy Has Left The Building” were premature.